For regulatory reasons, in order to view listings and place indicative bids on securities through SecondMarket, you must be an Accredited Investor or Qualified Institutional Buyer (“QIB”) (please see below for descriptions of each).  However, you do not have to be an Accredited Investor or QIB to list your assets for sale or explore other features on our platform (i.e. add private companies to your Watchlist, add people to your network of Trusted Connections, view news and publicly available data, etc.).

Accredited Investor

The term “accredited investor” is defined in Rule 501 of Regulation D of the U.S. Securities Act of 1933. The term “qualified institutional buyer” is also defined terms under the U.S. federal securities laws.

Individuals

In order to be deemed to be an Accredited Investor as an individual, you must be able to certify that:

• You are a natural person (individual) whose own net worth, taken together with the net worth of your spouse, exceeds $1,000,000. Net worth for this purpose means total assets (excluding residence but including personal property and other assets) in excess of total liabilities. (In calculating net worth, the related amount of indebtedness secured by the primary residence up to its fair market value may also be excluded. Indebtedness secured by the residence in excess of the value of the home should be considered a liability and deducted from net worth.); or
• You are a natural person (individual) who had an individual income in excess of $200,000 in each of the two previous years, or joint income with your spouse in excess of $300,000 in each of those years, and who reasonably expects to reach the same income level in the current year; plus
• In addition to certifying to either or both of the two points above, you must also be able to certify that you have such knowledge and experience in financial and business matters that you are capable of evaluating the merits and risks of investing in illiquid securities.

Entities

In order for an entity to be deemed an Accredited Investor, an authorized representative of the entity must be able to certify that the entity is one of the following:

• a bank, or any savings and loan association or other institution acting in its individual or fiduciary capacity;
• a registered broker or dealer;
• an insurance company;
• an investment company or a business development company under the Investment Company Act of 1940;
• a Small Business Investment Company licensed by the U.S. Small Business Administration;
• any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
• an employee benefit plan whose investment decision is being made by a plan fiduciary, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan whose total assets are in excess of $5,000,000 or a self-directed employee benefit plan whose investment decisions are made solely by persons that are accredited investors;
• a private business development company under the Investment Advisers Act of 1940;
• either (i) an organization described in section 501(c)(3) of the Internal Revenue Code, (ii) a corporation, (iii) a Massachusetts or similar business trust, or (iv) a partnership, in each case not formed for the specific purpose of acquiring the securities offered and in each case with total assets in excess of $5,000,000;
• an entity as to which all the equity owners are accredited investors; or
• a trust, not formed for the specific purpose of acquiring any specific securities offered, with total assets in excess of $5,000,000 and whose purchase is directed by a sophisticated person.

Qualified Institutional Buyer

A qualified institutional buyer ("QIB") is any of the following: (i) an insurance company, investment company, business development company, Small Business Investment Company, employee plan maintained by a State, employee benefit plan, trust fund composed of employee plans maintained by the State or employee benefit plans, business development company, 501(c)(3) not-for-profit organization, corporation, partnership, Massachusetts or similar business trust or investment adviser, each owning and investing on a discretionary basis at least $100 million of securities of unaffiliated issuers; (ii) a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934: (x) owning and investing on a discretionary basis at least $10 million of securities of unaffiliated issuers; provided that the securities constituting the whole or a part of an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be deemed to be owned by such dealer or (y) acting in a riskless principal transaction on behalf of a QIB; (iv) investment company that is part of a family of investment companies that own in the aggregate at least $100 million of securities of unaffiliated issuers; (v) an entity in which all of the equity owners are QIBs; and (v) domestic or foreign bank or savings and loan association or other institution owning and investing on a discretionary basis at least $100 million in securities of unaffiliated issuers and that has an audited net worth of at least $25 million. For a complete definition of QIB, please see Rule 144A of the Securities Act of 1933.

The above information is provided for your information only.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.